Let Property Insurance
London Landlord fined for safety breaches
Many of our landlord insurance policyholders would be very happy indeed with a monthly rent of £2,8000 on one property. This was not the case with a Battersea landlord who decided that the £2,800 a month he was receiving on his six bedroom property was not enough so he converted it to an eight bedroom house and added £850 to his rental income. The problem was that this rendered the house unsafe, and broke various planning laws.
The landlord had an HMO licence for a six bedroom property but partitioned off a communal area to create two more bedrooms. This meant that there was a fire safety hazard, as well as other planning issues.
The Court ordered him to pay a fine of £5,000 and costs of £3,348.
The rules on Houses in Multiple Occupation are quite complex and any landlord insurance client thinking about entering this market needs to obtain the necessary licence and comply with its terms. Also remember to obtain all the necessary consents before doing any building work. Your local planning authority website is the first place to look.
£2m in unclaimed deposits sitting in DPS account
Landlord insurance clients might be surprised to learn that many tenants fail to ask for the return of their deposits at the end of the tenancy. In 2010 the Deposit protection Service returned £3m of unclaimed deposits but it is still holding £2m on behalf of tenants who have failed to contact them. It has even introduced a text messaging service to remind tenants.
The DPS protects 670,000 deposits in the UK. The service is free of charge, being funded by the interest on the deposits it holds. Experienced landlords will be well aware of the need to protect their tenants’ deposits in an accredited scheme but newcomers to the business should check up on the rules to avoid breaking the law. Gone are the days when landlords could hold on to the funds and drag their heels about repaying them.
There is some useful information about deposit protection on the DPS website www.depositprotection.com Our landlord insurance clients might find it well worth a look.
New Universal Credit – Concerns For Landlords
The government is committed to replacing the complex system of benefits with one single payment – The Universal Credit. The housing element of the Universal Credit will be paid to tenants to cover their accommodation costs. The Residential Landlords Association is campaigning to have this element paid directly to landlords rather then to the tenants. The problem is that sometimes the tenant uses it to cover other outgoings or debts and does not pass it on, leaving the landlord out of pocket and possibly unable to pay their bills such as landlord insurance.
According to the RLA many potential landlords are deterred from entering this sector of the market because of worries abut the security of rent payments and other costs such as landlord insurance. If potential landlords had a guarantee that their rents would come through regularly they would be far happier about it. Housing Associations are already in this position because they receive their income direct rather than from the tenant.
What are your thoughts on landlords receiving rent directly rather than via the tenant? If landlords received money direct would it lead them to provide a improved standard of accommodation as the rent is guaranteed or would taking the property choice away from tenants decrease competition and therefore the state of some property rented to benefit tenants?
Letting Agent Jailed For 21 Months
A Norwich letting agent has been sentenced to 21 months for stealing £137,000 from his landlord clients and their tenants. He had been receiving rents on behalf of landlords and not paying them over. In addition when he received deposits from tenants he failed to pay them to an appropriate protection scheme.
Something like 65 people have lost out as a result of this breach of trust but most of the money has disappeared and so any recovery is likely to be minimal.
Whoever manages your let property for you it makes sense to keep a careful eye on the finances. Are rents finding their way through to your bank account promptly for example? Are let property insurance payments being made if arranged for you? Your contract with the agent will set out how much should be deducted (and for what) and if the tenant is paying on time there is no reason why you should not see a steady flow of rents into your own account. If not, find out what is gong wrong before the problem escalates.
Make sure your let property insurance is in force and you are covered as if you are left uninsured you run the risk of losing your whole investment rather than just one or two months rent. If you require insurance contact Click4quote.com or get a quote online.
Gaining Posessions – About to Get Harder?
Many landlords are frustrated by the problems they can face if tenants breach their agreements and have to be removed. The process that must be followed is complex and must be strictly adhered to. Landlords have commented that most suppliers do not have to keep providing a service if the customer stops paying but landlords sometimes have to put up with tenants who “work the system” and stay in occupation for as long as possible, rent free.
A campaign called “Rebalancing the Law” is being mounted by landlords’ organisations to push for the procedures to be simplified and speeded up. They say that if there is a clear case of tenants refusing to pay or committing anti-social behaviour they should be evicted quickly; apparently it can take several months at the moment.
Check out the campaign on www.landlordaction.co.uk
The Ministry of Justice is planning to close many County Courts. These Courts are the backbone of the legal system for landlord and tenant disputes. The Ministry of Justice website will show whether your local Court faces closure. Will this make it harder for you to gain access to justice?
If you have rented property then you should purchase landlord insurance to protect your investment. You can often purchase landlord building insurance with additional options such a legal cover which includes some protection to reclaim your property.
Landlords face £5,000 fines for poor insulation?
The government is determined to improve the energy efficiency of the housing stock and is planning to force local authorities to put pressure on landlords of let property to insulate them. Local authorities already have power to require landlords to carry out work on their properties or face fines of up to £5,000. These fines would not be covered by your landlord insurance and although landlords legal insurance can protect you for some specified legal action fines imposed on you would not be covered.
Further laws are planned so that if tenants request energy efficiency work at a let property the landlord cannot refuse without a very good reason. The government is hoping to introduce this new right for tenants by 2015.
The English House Condition Survey in 2008 found that private rented houses were among the worst performing properties in terms of energy efficiency. 68% of private rentals had no cavity wall insulation and 45% had poor loft insulation.
Landlords have responded by arguing that the private rented sector includes many older houses that are difficult to bring up to modern insulation standards. Despite this it seems that landlords will have to develop a plan to bring their properties up to scratch or risk intervention from the authorities.
Wrong locks can invalidate policy
When you fill in a proposal form for property insurance you will almost certainly be asked about the locks. It is easy to assume that your property, whether it be your own home or an unoccupied one has suitable locks on all the doors or windows. If you are insuring your own house as an owner occupier it is easy to check but this is not the case with a let or unoccupied property that might be miles away. The worst thing you can do is assume that the security precautions comply with your insurers’ requirement- there is no alternative to checking them yourself or asking someone else to do it for you. You will find variances of security required for homeowner insurance, unoccupied property insurance and landlord insurance.
Most insurers will require five lever mortice locks conforming to BS 3621 and there may be special rules about patio doors so check your policy. If you fail to comply with the standards set in your policy you may find your claim turned down. It may make sense to change the locks periodically; especially if you know that several people have been given keys but you can only account for a few of them.
Compulsory fire alarms?
A Devon MP, Adrian Sanders is hoping to change the law to make it compulsory for landlords of let property to fit fire alarms. He is promoting a private member’s bill, The Fire Safety (Protection of Tenants) Bill which is due to go the House of Commons for a second reading on 19th November. The Bill comes in the wake of a fire in a let property in Devon in which two children died and in which there was no alarm. If the Bill becomes law as drafted landlords will have to fit a mains alarms at the start of a tenancy but it will then be the tenant’s responsibility to maintain it.
Mr Sanders does not underestimate the difficulty of getting a private member’s bill through parliament but hopes that even if he fails he will be able to introduce fire alarm regulations in some other way because he is certain they will save lives and property.
If you have a let property and require let property insurance contact click4quote.
Mortgage figures – bad news or good?
Buy to let property landlords will have mixed opinions about recently released figures showing mortgage lending at its lowest for ten years. If you are already the owner of a portfolio of properties you are probably thinking that plenty of applicants will come knocking on your door when they decide they do not want to buy a house, or cannot raise the deposit. On the other hand prices seem to be falling- according to Halifax the average house dropped by £6,000 in September. Not very good news for the buy to let landlord who has just bought a new property.
Some of the experts are very gloomy indeed about the freehold market. Howard Archer at HIS Global Insight reckons that the housing market “has very little going for it at the moment, apart from low mortgage rates- and that is if you can get a mortgage.”
As with so many decisions it all depends on timing- if you buy at the right time you can’t go wrong- but who knows when the time is right?
If you own buy to let property you will need specialist buy to let property insurance. Contact click4quote for a great deal on let property insurance.
Changes to Assured Shortholds
From 1st October 2010 the rental threshold for Assured Tenancies has increased from £25,000 to £100,000. This means that if you let out a property on a rent of up to £100,000 per year the tenancy will normally fall within the Assured Shorthold rules under the Housing Act 1988.
Existing tenants will not see much change but for tenancies starting after 1st October landlords will need to use one of the deposit protection schemes to safeguard the tenant’s deposit. The accelerated possession rules will apply and landlords will have to follow the Housing Act rules for requesting rent increases.
If an existing tenancy is renewed or a new deposit is taken, a deposit protection scheme must be used.
If you have purchased landlord insurance you should make sure your loss of rent cover is adequate for your needs as it is usual for most policies to be limited to 20%. Checking your landlords insurance policy wording should be easy as this benefit will be clearly defined.
If you require let property insurance for your rented property contact click4quote or go online to get a quote.